Turning my future generations into Trillionaires

hinchy70

Hi all, apologies for the outlandish title. 21 M. I have accrued a capital pot of around 15-20k, and I would like to invest 15k of this for around 70-100+ years (sounds crazy, but bare with me), Coming from a working class family, I am determined to break the cycle and that my future generations, will be far wealthier in cash and opportunity than my family ever was!

So after fiddling around with calculations, using the rudimentary rough figure of 8-10% per annum of growth (non inflation adjusted), in 50 years that 10k will be north of £1mil, but if we bump it up to 75 years it is north of £15mil, 100 years is around £100-200million. And 200 years (id love to know what people’s opinions on how to do this) it is over £2trn! Of course not inflation adjusted and optimisitc growth forecasts I am aware.

So what is the best way of achieving this, how do I protect my investments legally for that length of time, and how do I protect them from a statistically likely divorce. Can I speak to a law/investment firm and have this put in place without any offspring at the moment?

My social mobility ceiling may be the lower/established middle class, and so too may be my children, but the generations after that I want to have the opportunity to make a real difference!

I’d love to know if anyone is thinking similarly, or has knowledge of how to ensure that this happens whilst being shielded from the statistically probable events that happen in life.

mattvolatile

You could do this with a trust but you're missing a tonne of factors, including management fees (which will be hefty), taxes, inflation, and whether or not you're going to maintain any access whatsoever to the capital, which will mean that the fund could count as belonging to you if you are made bankrupt, get divorced, etc. See https://www.moneyadviceservice.org.uk/en/articles/setting-up-a-trust.

Your sums are pretty wild, tbh, given the fact that the investment horizons you're talking about aren't unusual for pension schemes, and if it was as simple as "putting ten k away for a century and then we're all trillionaires", we'd have solved poverty and hunger by now.

It's a nice idea, honestly, abs very romantic, but it's a really bad idea with very flawed premises.

mattvolatile

Also... your sums are wrong anyway!

£15000 @ 8% exponential growth with no fees gets to £32 million in a century, and £72 billion in two centuries. Given that historical inflation is about 5%, this really isn't the brilliant plan you think it is.

£1 in 1919 is about £65 in 2019, so just very roughly, if we assume similar inflation, that £32 million in 2119 will be equal to about half a million quid today...

easterbunni

There have been many instances in history where accumulated or inherited wealth is lost or squandered, so one of your descendents will likely blow it anyway. Best to invest in education.

iglad

hinchy70 wrote: »

Hi all, apologies for the outlandish title. 21 M. I have accrued a capital pot of around 15-20k, and I would like to invest 15k of this for around 70-100+ years (sounds crazy, but bare with me), Coming from a working class family, I am determined to break the cycle and that my future generations, will be far wealthier in cash and opportunity than my family ever was!

So after fiddling around with calculations, using the rudimentary rough figure of 8-10% per annum of growth (non inflation adjusted), in 50 years that 10k will be north of £1mil, but if we bump it up to 75 years it is north of £15mil, 100 years is around £100-200million. And 200 years (id love to know what people’s opinions on how to do this) it is over £2trn! Of course not inflation adjusted and optimisitc growth forecasts I am aware.

So what is the best way of achieving this, how do I protect my investments legally for that length of time, and how do I protect them from a statistically likely divorce. Can I speak to a law/investment firm and have this put in place without any offspring at the moment?

My social mobility ceiling may be the lower/established middle class, and so too may be my children, but the generations after that I want to have the opportunity to make a real difference!

I’d love to know if anyone is thinking similarly, or has knowledge of how to ensure that this happens whilst being shielded from the statistically probable events that happen in life.

Invest the money for the long-term but perhaps it best if you set up an education fund, which will pay school fees, uni fees etc. I think it's a great idea as I was thinking of doing something like this for my nieces and nephews children. Also it was an educational trust set up by Kate Middleton's ancestor (a wealthy Yorkshire industrialist) that allowed her to receive a private education and then onto University where she met Andrew so her social mobility was all down to education and that fore-sighted ancestor.

Not a royalist just stating an interesting fact.

TBC15

Nice to hear of someone looking for a dynasty for a change. Education of those who follow is the main problem.

Edit. Not making a complete !!!! of the investing is probably point 1.

bostonerimus

My plan is also to leave my family well off. What the OP is talking about is a family trust that invests money across generations and gives out income to the beneficiaries.

I'm going to do something simpler and just leave money to my heirs rather than spending it all and then let them figure out what to do with it.

Voyager2002

You might care to ponder Bill Gates' opinion on whether it is good for someone to inherit lots of money (he thinks not):
https://www.cheatsheet.com/entertainment/the-real-reason-bill-gates-children-wont-inherit-much-of-his-fortune.html/

enthusiasticsaver

I am not sure that leaving a large sum of money to your heirs when you are not sure if they will squander it is such a good idea. Far better to educate (your at present non existent children) both in educational terms and financial management. Why do you feel being from a working class family is such a barrier to success? My dad left school at 14 with no qualifications and became a shipping clerk and ended up as the chairman of a multi national chemical company. My husband was a poorly paid apprentice and retired early with a large pension after working his way up to become a well paid electronics engineer for a large multi national medical engineering company. He came from a single parent family and his mum was a secretary. The only barrier to success is an unwillingness to work hard and a lack of ambition to improve your lot. Handing all your hard earned dosh over to your heirs without making sure they have a good work ethic and enough sense not to blow it all on the 3.30 at Kempton sounds like a recipe for disaster.

I am ignoring your maths and assumptions on growth and ignoring inflation as this is a bit pie in the sky thinking.

DairyQueen

Setting aside the widely-optimistic investment returns, and concentrating on the idea in principle...

The most likely outcome would be that many of the beneficiaries of your largesse would lose it through mismanagement or reckless spending. As others have mentioned, if you wish to endow your descendants with their best opportunity for social mobility invest in a trust that will provide a decent education, including training in financial management.

I don't know many lazy people but I know plenty whose financial naivety have parted them from their hard-earned cash. The lack of financial knowledge in the UK is truly breath-taking.

sendu

Using more realistic figures...

The global stock market has done about 4% above inflation per year so far. Management fees and taxes might drop that to 3%, being generous. Maximum of 120 years allowed by law. There could be about 200 descendants.

You end up with £2,600 for each descendant. Really not worth the effort.

Invest and spend the money on your own family, and concentrate on educating your children on the importance of managing their finances and understanding investments.